HSU vows to continue hunt for missing millions

Anne Davies

The embattled Health Services Union has vowed to press on with the search for its missing millions squandered by former union boss Michael Williamson.

As the HSU prepares to face the royal commission on union corruption, its state council was told on Monday that the union had staunched the flood of members leaving the union as a result of the scandals involving its officials, notably Mr Williamson and former Labor MP and national secretary Craig Thomson.

At the height of the revelations in 2012, the union lost 5000 members, but in the last 12 months had recruited 1400 new members, state secretary Gerard Hayes told the meeting.

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The union, which represents health workers from hospital cleaners to ambulance drivers, has repaired its balance sheet by cutting officials' salaries, unwinding inflated contracts, and slashing printing costs. It has emerged from administration and is now running a small surplus and has net assets of $8 million.

''This union has already had the Temby review [commissioned by the union], an administrator and a very major police investigation,'' Mr Hayes said. ''We will engage with the royal commission. I would just make the point that the Downing Centre is full of wrongdoers but there is no royal commission into their activities.''

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Among the legal avenues being explored by the HSU to recover funds is a civil claim for funds from the sale of a Fijian island, owned by Alf Downing, whose company, Access Focus, supplied merchandising to the union.

The Temby report found Mr Downing always dealt with Cheryl McMillan, the union's former procurement manager and reportedly Williamson's long-term mistress, and prices were inflated by 20 to 25 per cent over a five-year period. Ms McMillan's lawyer, Simon Konstantinidis, did not return calls, and Mr Downing could not be reached.

HSU lawyers want to recover $2.4 million from Mr Downing and also from Ms McMillan, although she has no known assets after selling her share in a Sydney house to her daughter in 2012.

A judgment for $5 million has been obtained against Mr Williamson but he has declared bankruptcy. The union is seeking a public examination of his family's assets to see if any funds can be clawed back beyond the $1.7 million agreed as part of his criminal plea bargain.

Viwa island, in the Yasawa group, has 11 ''luxury'' bures. It is being marketed by the Professionals West Realty in Fiji, and the asking price is $F3.6 million ($2.1 million).

The union is also suing Peter Mylan, who stepped in to run the union after Mr Williamson stepped down. In another civil claim, it alleges Mr Mylan negligently approved a contract for IT services with a company, United Edge, in which Mr Williamson was a shareholder. The union has negotiated a new contract with an IT supplier which is $500,000 a year cheaper. The union alleges that the contract with United Edge was inflated and is seeking up to $2 million from Mr Mylan.

The Temby report said of Mr Mylan: ''It is difficult to the point of practical impossibility for Mylan or anybody else to deal with United Edge, unaffected by their knowledge of Mr Williamson's close connections with the company.'' Mr Mylan did not return calls.

A third civil case has begun against remuneration adviser Beth Jensen. It is argued she was negligent in the preparation of a remuneration report which was used to justify big salary increases for Mr Williamson and other elected officials in 2010 and early 2011.

The union says the report used state government executive service salaries, which include superannuation, as a comparator. It alleges she failed to take account of other benefits and additional fees union officials were paid. Raey McGuinness, the solicitor representing Ms Jensen, said the action would ''be defended and defended vigorously''.